- Pound (GBP) exchange rate dives notably after voting results – Leave on 52%, Remain on 48%
- Prime minister resigns after losing campaign – Second Scottish referendum on the cards?
- Euro triumphs against battered Sterling – Unsettled elsewhere on fears of EU breakup
- Spanish Election Ongoing Today – EU leaders attend ‘Brexit’ emergency summit
Pound (GBP) exchange rates have been seriously suffering since Friday owing to the decision by the UK to leave the EU.
The result came as something of a surprise given that the latest polls had indicated a ‘Remain’ victory and the news sent the UK currency spiraling downwards.
The Euro, by contrast, has been a comparatively more positive option, though sizable losses have also been recorded for the single currency against its more successful peers.
UK Economic News: Decision to ‘Brexit’ Shattered Confidence in the Pound Last Week
Sterling has been an extremely unsafe option for investment of late, due to the sole reason that the UK voted to leave the European Union last week.
In the aftermath of the unexpected ‘Brexit’ vote, the Pound nosedived across the board, recording notable losses of -3.5% against the Euro (GBP/EUR), -8% against the Japanese Yen (GBP/JPY) and over -10.4% against both the Egyptian Pound (GBP/EGP) and the Omani Rial (GBP/OMR).
Further economic damage came during the morning as investors continued to abandon the Pound – Prime Minister David Cameron announced his resignation outside Number 10, Scottish First Minister Nicola Sturgeon strongly hinted at a second Independence Referendum taking place and a vote of no confidence was issued by Labour MPs Margaret Hodge and Ann Coffey against Labour leader, Jeremy Corbyn.
Closing off his resignation speech, Cameron said on Friday morning:
‘I said before that Britain can survive outside the European Union and indeed that we could find a way. I love this country and I feel honoured to have served it and I will do everything I can in future to help this great country succeed’.
Euro Movements around the EU Referendum Vote Sporadic due to US Strength
The appeal of the Euro in the aftermath of the EU Referendum was strong against the Pound, although in other pairings, the single currency has dropped off significantly due to the amplified appeal of safe-haven currencies.
Gains for the Euro consisted of 0.9% against the South African Rand (EUR/ZAR), 1.9% against the Polish Zloty (EUR/PLN) and 3.7% against the Pound (EUR/GBP), while losses were made up of -0.9% against the Australian Dollar (EUR/AUD), -2.5% against the US Dollar (EUR/USD) and -4.9% against the Japanese Yen (EUR/JPY).
Amid more general concerns about the disintegration of the European Union, a number of Eurosceptic party leaders across the EU called for referendums in their own countries.
Future GBP, EUR Forecast: Spanish Election Today, ‘Brexit’ Summit Scheduled Tomorrow
The near-term in the Pound Euro exchange rate is only likely to be influenced by the continued fallout of the EU Referendum results, although outside of this impact, there will nonetheless be economic announcements and events coming from the UK and the Eurozone.
In the former case, Tuesday will bring the CBI distributive trades result for May, while following on from this on Wednesday morning will be the Bank of England (BoE) consumer credit result for May, which has been forecast to rise.
In the case of the Eurozone, today will see Spain hold a general election, while following on from this tomorrow will be a post-EU Referendum summit in which EU leaders will decide upon their negotiation criteria for the UK’s exit.
Based on the fact that the UK is now on its way out of the EU, it is possible that the outcome of the Spanish election will be swung significantly in favour of more anti-EU parties due to fresh concerns that the breakup of the European Union is now on the cards.